Only six North American funds have made investors money this year

Just six funds focusing on North America have made money in sterling terms for UK retail investors this year.

Including the open-ended fund universe and investment trusts, this means just 6% of funds  investing in the sector have been able to see any gains amid the tariff turmoil. So how have the lucky few been able to succeed?

Well, one of them invests almost exclusively in Canada. And interestingly, one is a sustainable fund, a sector which has been out of favour with investors in recent years.

Magnificent Seven exposure has mostly been a hindrance this year

Perhaps the most consistent pattern across the top performers is that they aren’t reliant on Magnificent Seven stocks, such as Apple, Nvidia, Amazon and Tesla, which were major contributors to the US market in 2023 and 2024.

Fund managers often argue their skills are best exhibited in choppy market conditions. Sometimes it’s about knowing which parts of the market to avoid or only have limited exposure.

This year, having limited or no exposure to the Magnificent Seven group of stocks has been a winning trade. Meta and Microsoft are the only two members of this group to have delivered positive returns year-to-date. That’s quite a change in fortunes and many investors hoping for a third year of stellar returns from this pack will be sorely disappointed.

The names that stand out from the pack

Here are the six funds that generated positive returns when looking at performance in pounds sterling.

When looking at performance priced in dollars, there is a far more extensive list of winners. However, many UK investors will opt for pound-denominated versions of North American funds as they’re more comfortable with their home currency.

Source: AJ Bell, FE Fundinfo, data taken 13 May 2025. All performance data in pounds sterling

How does that performance compare to the broader US and global markets?

The MSCI World has dropped 2.4% since the beginning of the year, while the S&P 500 has dropped over double that amount to 5.4%, both in sterling terms.

Certain North American trusts and funds have done a lot worse. For example, JP Morgan US Smaller Companies has stomached a 14.5% loss so far this year, and Baillie Gifford US Growth Trust is down 13.9%.

Artemis US Smaller Companies has dropped 14.6% while CT American Smaller Companies has fallen 14.2%.

How have global funds fared?

Despite many global funds having a high weighting towards the US, diversification among different countries have saved them from as bleak of a picture.

While just 6% of North American funds have churned out positive returns this year, 27% of global funds have been able to stay in the black. The benefits of diversification this year have also been reflected in the indices.

Most investments are judged over a period of years, not months. On average, investment trusts focused on North America have returned 15.2% yearly in the past five years. None of the investment trusts have had a negative average return over this period. Open-ended North American retail funds have had an average of 12.8% each year.

In cumulative terms, the S&P 500 index of US shares has returned 103.1% over five years while the MSCI World has returned 90.3%. Those are impressive numbers, but there is no guarantee they will always be that good.